The shift to working from home after the pandemic has significantly altered traditional workplace dynamics, offering employees and employers alike greater flexibility and autonomy. However, as organizations adapt to new hybrid or remote work models, employers must tread carefully when making changes to established work-from-home arrangements. Recent decisions from courts in Ontario and Alberta suggest that unilateral decisions to revoke remote work arrangements could expose employers to the risk of a constructive dismissal claim.

I. Overview of the Law of Constructive Dismissal

The Supreme Court of Canada has defined the concept of constructive dismissal in Farber v. Royal Trust Co., [1997] 1 S.C.R. 846 at para 34:

A constructive dismissal occurs when an employer makes a unilateral and fundamental change to a term or condition of an employment contract without providing reasonable notice of that change to the employee. Such action amounts to a repudiation of the contract of employment by the employer whether or not he intended to continue the employment relationship. Therefore, the employee can treat the contract as wrongfully terminated and resigned which, in turn, gives rise to an obligation on the employer’s part to provide damages in lieu of reasonable notice.

In Potter v. New Brunswick Legal Service Commission, 2015 SCC 10, the Supreme Court of Canada further articulated a two-prong test to determine if constructive dismissal has occurred. Satisfaction of either branch of the test is sufficient, and the Court is called to apply an objective analysis in determining whether there was a breach of the employment contract. The first branch of the test requires the Court to review the specific terms of the employment contract and determine whether there has been a substantial alternation to an essential term of the contract. The second branch allows for constructive dismissal to be established when, viewed in light of all the circumstances, a reasonable person would believe that the employer no longer intended to be bound by the contract. The focus on the second branch is on a cumulative effect of past acts by the employer, rather than a single act. The employee bears the burden of proof to establish that they have been constructively dismissed.

II. When “Return-to-Office” Amounts to Constructive Dismissal

a. Byrd v. Welcome Home Children’s Residence Inc., 2024 CarswellOnt 21744

In Byrd v. Welcome Home Children’s Residence Inc., the Ontario Superior Court of Justice – Small Claims Court (the “Court”) found that an employee had been constructively dismissed after her employer required her to return to in-person work in Canada, following over a year of working remotely from Europe. The Court concluded that remote work from Europe had become an established and accepted condition of her employment, and that the employer had never reserved or communicated a right to require her return. As a result, the demand to resume in-person work constituted a repudiation of the employment contract.

The Court agreed with the employee’s position that, under the circumstances, she had been constructively dismissed.  It held that the employer’s ultimatum—return to in-person work or resign—constituted a repudiation of the employment contract and a constructive dismissal.

This conclusion was grounded in two key findings: (1) the employee’s ability to work remotely from Europe had become an accepted term of her employment; and (2) the employer had neither established nor communicated any right to require her return to in-person work.  In determining that remote work had become a recognized part of the employee’s role, the Court placed little weight on disputed oral conversations and instead relied on the undisputed fact that she had worked remotely for over a year without interruption or objection from the employer.

The Court emphasized that a fundamental change—such as requiring an employee to relocate from Europe to Ottawa for in-person work—demands clear and timely communication, which was lacking in this case.

b. Nickles v. 628810 Alberta Ltd., 2025 ABKB 212

In Nickles v 628810 Alberta Ltd., the Alberta Court of King’s Bench ruled that an employer’s rollout of a “return-to-office” amounted to constructive dismissal for an employee who had worked remotely for nearly four decades.

The plaintiff in Nickles served as an office manager from 1986 to 2023, during which time she consistently worked from home. Although she occasionally went into the office, it was largely at her own discretion, and there was no disagreement that the position was effectively remote.

Following a change in ownership, the employer introduced a formal return-to-office policy, requiring the plaintiff to begin working in the office full-time. The employee was given less than three months to comply. She objected, arguing that this was not a return to an original arrangement, but a substantial shift in the terms of her role.

After consulting legal counsel, the employee claimed constructive dismissal. In response, the employer proposed a hybrid work model—2.5 days per week in the office—with the possibility of increasing to full-time in-person work based on how things progressed. The employee rejected the offer and brought a wrongful dismissal claim.

The Court held that the employee’s 37-year work-from-home arrangement had become a central and essential element of her employment. The employer’s attempt to impose a significant change to that arrangement on short notice, without the employee’s consent, constituted constructive dismissal.

Significantly, the judge emphasized that this case was distinguishable from situations arising out of pandemic-era work transitions. As the Court put it:

This was not a return-to-work arrangement of the type that was common after the COVID pandemic. The COVID return to work template does not fit this paradigm. This was an arrangement where the work was always from home.

The Court’s conclusion, therefore, turned on the unique and long-standing nature of the plaintiff’s specific remote work history.

On the issue of mitigation, the Court concluded that the plaintiff was not required to accept the employer’s proposed hybrid role. Since the offer involved the same fundamental change that had triggered the constructive dismissal claim, accepting it would have undermined her position.

The Court noted that an employer cannot sidestep the legal consequences of altering a fundamental term simply by presenting the same change as a mitigation opportunity.

III. Takeaways

As remote and hybrid work arrangements become a lasting feature of the post-pandemic workplace, both employers and employees must take care to clearly define the terms of such arrangements. Recent court decisions—including Byrd v. Welcome Home Children’s Residence Inc. and Nickles v. 628810 Alberta Ltd.—demonstrate that long-standing or undefined remote work setups can create legal obligations.  In particular, attempts to unilaterally revoke or alter these arrangements may expose employers to claims of constructive dismissal.

To avoid disputes and reduce legal risk, the following checklist outlines key considerations when entering into, or modifying, remote work arrangements:

1. Document the Arrangement in Writing

2. Include a Right to Recall (If Desired)

3. Review and Update Employment Contracts

4. Avoid Sudden or Unilateral Changes

5. Treat Longstanding Arrangements as Potentially Binding

6. Communicate Clearly and Consistently

7. Consider Individual Circumstances

President Trump has officially announced his plan for significant tariffs on imports from Canada and Mexico, with most goods being hit with an additional 25% tariff. The move will unquestionably penalize American consumers of Canadian goods, but our manufacturing and agriculture sectors will undoubtedly be hit hard.

With our Prime Minister awaiting a leadership change, an Ontario Provincial election coming in weeks and a Federal one likely soon to follow, it is hard to tell exactly what will come next. The Prime Minister has launched retaliatory counter-tariffs, and the Premiers have actively been meeting with their Washington counterparts. However, all accounts indicate that President Trump remains undeterred, and it is unclear exactly what ‘victory’ he is seeking here. 

What we do know is that the impacts on the workplace will be profound.  Some estimates suggest nearly 2 million Canadian jobs are on the line, which would have significant impacts on businesses large and small. Yet if you need to conduct a mass termination within your workplace, you should know that you’re playing by a different set of rules under the law. 

What is a mass termination in Ontario, and what do employers need to know?

What is a mass termination?

Under the Employment Standards Act, 2000 (the “Act”), a mass termination means letting go of 50 or more employees from an establishment within a four-week period. If an employee works exclusively remotely (i.e: from home) then their home is counted as their workplace for the purposes of a mass termination. If they work from home as well as from an office location then the office is considered the establishment. 

While ‘mass’ is defined as more than 50 employees, the employer’s legal requirements under the Act vary given how many employees will be let go. These obligations are triggered as soon as there are more than 50, but notice periods for 50 employees vs. 200 employees will look different under the law. 

How should employers conduct a mass termination?

A mass termination requires employers to notify the Ministry of Labour before taking any further steps. This is done in the form of a Form 1, which is also downloadable from the Ministry of Labour’s website. This notice needs to be sent in written form to the Director of Employment Standards’ office. It can be done via email, fax, in person, or through mail delivery.

This Form 1 notice also needs to be posted publicly within the workplace, and delivered to each individual employee who will be impacted by the layoffs. No notice period begins until the Form 1 has been distributed widely and through the proper means. In other words, employers who forget or are unaware and skip this step may be on the hook for a prolonged notice period given the circumstances. 

What severance is required in a mass termination?

The amount of termination pay is determined by the Act based on the number of employees involved in the mass termination:

50 to 199 employees: 8 weeks’ notice or pay in lieu of notice

200 to 499 employees: 12 weeks’ notice or pay in lieu of notice

500 or more employees: 16 weeks’ notice or pay in lieu of notice

These measurements are irrelevant of how long an employee has been with your organization, so even a newer employee may be entitled to 16 weeks’ pay in lieu of notice. 

However, employees that have been with the organization for 5 years or longer may also be entitled to severance pay. This is an additional amount under the Act for employees of longer duration where the company has more than 50 employees, or a payroll over $2.5 million. This amount will be unique to each employees’ length of service, but can be up to 26 weeks. 

Can I conduct temporary layoffs instead?

The answer to this depends entirely upon your employment agreements. While the Act does have provisions for temporary layoffs, both parties must have previously agreed to this option in a written employment contract. Without a written employment contract that states that temporary layoffs are a possibility, and will not be considered a dismissal, then they may actually be a termination of employment.

The leading case on constructive dismissal is a Supreme Court case that involved a senior level employee who was temporarily laid off without having previously agreed. The Supreme Court established that this sort of substantial, unilateral change by an employer can indeed become constructive dismissal. In other words, employees could claim that they were actually terminated, and the Court may very well agree. 

Is the minimum severance payment enough?

Not necessarily. While the Act requires a minimum amount of severance specific to mass terminations, that does not mean that employees are required to accept that amount. Depending on their employment contract and what limitations it holds, employees could potentially sue for common law notice. 

Remember, if an employee has no written employment contract, or if their contract was hastily drafted years ago and has not been touched since, there may be a problem. Unwritten or badly written contracts do not lock an employee into just accepting your minimum offer, which means that they could potentially sue for a larger amount.

Final Thoughts

The answer comes from working with an employment lawyer. Even in a mass termination, a lawyer can help assess individual situations, and offer advice to help you mitigate your risks. Taking the extra measures to do things properly may be a nuisance in the moment, but can end up saving the business from significant financial penalties in a courtroom later on.

This is a difficult time full of uncertainty for everyone, but my mission as always is to protect Canadian businesses, and that will not change. Contact my office today to set up a consultation. 

“You are not going to make partner.”  

“You should find something else.”

No termination letter is presented.  

You will only be told that you have a few months to “find something else”, with vague explanations as to what will happen if you do not.  

You might be introduced to a ‘career coach’ to help you with this “transition”.  A transition to what, exactly?

No one will confirm whether your employment has been terminated or even use the word ‘terminated’ or ‘fired’.

You might stop receiving work.  

External clients may be told that you are ‘busy’ when you are not, and your files may be surreptitiously transitioned to a new junior lawyer that has recently joined the firm.  

Someone from a human resources-type department will repeatedly follow up with you to find out how your job search is going.  

You might even be ignored by some of the partners you have known for years and have worked tirelessly for, without thanks.  You might receive job postings from some of these partners.

Does this fact pattern sound familiar to you?

Well, it is one that routinely comes through my door.

Shocking as it might seem, this exact scenario plays out on a routine basis at some of the largest and allegedly most prestigious “Big Law” law firms in Toronto on Bay Street.  

Why? You may ask.  To avoid having to pay their associate lawyers their significant, lawful severance entitlements.

If you are an associate lawyer facing this scenario, now what?

A Primer on Dismissal

If you have not practiced employment law, not to worry. 

In Ontario, an employee can be terminated ‘without cause’ at any time, so long as you are provided with sufficient notice and the termination is compliant with the Human Rights Code and the Occupational Health and Safety Act.  

Terminations ‘with cause’ are for extremely rare forms of misconduct (i.e. fraud) that are unlikely to be at play in a Big Law law firm and employers that assert ‘cause’ when they do not have ‘cause’ can be hit with significant punitive, aggravated, exemplary or bad faith damages.

What makes a dismissal ‘wrongful’ is not that you have lost your job, but that an employer has not provided you with adequate severance.

How do you assess whether your severance is adequate?

The starting point is always the employment contract and what is said about termination.  There is a legal presumption that all employees are entitled to common law reasonable notice upon termination unless the employment contract clearly and unambiguously rebuts that presumption.  Much to the chagrin of employers, the enforceability of termination provisions is an ever-moving target, making it likely that an associate lawyer’s common law entitlements could range from somewhere between 4 to 8 weeks per year of service.

Now, what happens if you resign?  

If you resign, you are entitled to nothing.

Seek Advice

What your firm has done is created a stalemate.  

They have told you that you are not going to become a partner but they have not executed your termination, at least legally, by not providing you with the requisite written notice of termination as required by the Employment Standards Act, 2000 and O. Reg. 288/01.

Because of your significant remuneration package the firm is hoping to ‘shame’ you into resigning on your own volition, saving them a severance package.  

Whatever you do, do not resign and seek advice.

Even Big Law Bay Street lawyers need employment law advice, and there is absolutely no shame in that. 

The only shameful part is walking away without collecting your duly-owed severance.

Remember that given your significant remuneration package, this payment may be sizable, even if you are only owed the minimums prescribed by the Employment Standards Act, 2000.  For example, a 8-year employee at a large Bay Street law firm is likely entitled to at least 16 weeks’ wages – potentially more, if the termination provision in your employment contract is not enforceable.

I have routinely advised lawyers in exactly these situations. I know exactly how the mechanics operate behind the scenes. It is always advisable to seek a legal consultation before taking any next steps, and I am happy to discuss your situation further. Contact my office today to set up a consultation.